A purchase and sale agreement is a legally binding contract that creates obligations and rights for sellers and buyers. They usually apply to transactions involving the sale of products, not services. Also called Sales and Purchase Agreements (SPA’s), these agreements are found in nearly every type of sales transaction. They help foster good business relationships between parties and help to ensure that transactions are conducted honestly and without fraud. They are sometimes simply called purchase agreements.
Most purchase and sale agreements create duties for the parties. For the seller, the agreement requires them to sell the specific product at a set price. They may also be required to deliver the product at a set time and date. For the buyer, they are often obligated by the agreement to provide the full payment price and to accept delivery of the goods.
In some cases, a purchase and sale agreement may involve mutual promises by the parties that they will only deal with one another. For instance, the buyer may promise that they will only buy from that particular dealer, who in turn will sell a set amount of products at a fixed price. In other cases, the purchase and sale agreement may contain terms for future dealings between the parties.
Purchase agreements are basically business contracts, so they are enforced under the contracts laws in the state where they are created. Disputes over contract terms are generally reviewed in a court of law. The courts will usually refer to the agreement document itself to resolve the issues. Legal damages may be awarded for the non-breaching party.
A common example of a dispute is where the seller promises to sell to a specific buyer, then later sells to a different buyer. The seller may then be required to reimburse the buyer for their lost opportunity.
Purchase and sale agreements are important aspects of many business transactions. You may wish to hire a business lawyer if you need help negotiating or drafting a purchase agreement. Your lawyer can provide you with legal advice and guidance with the document. Also, your attorney can represent you if a legal dispute arises and you need to file a lawsuit.